Hachette finds itself at the hand of Amazon's wrath over contract negotiations.

Amazon is waging war against publisher Hachette over failed contract negotiations and has escalated its tactics as of Friday, according to the New York Times. Amazon has begun refusing orders and removing books sold by the publisher, telling customers that they are not available.

JK Rowling's new novel The Silkworm, which is published by Hachette, is no longer available through Amazon. Neither is the paperback edition of The Everything Store, a book about Amazon's business practices. Amazon has also reportedly slowed delivery of certain Hachette books, telling customers they would take several weeks to arrive.

The Times writes that Amazon is specifically after higher profit margins on Hachette's e-books, a result of pressure on the company from Wall Street to become more profitable as a whole. Hachette was one of the major publishers that attempted to switch to an agency model where publishers set prices and then paid distributors like Amazon or Apple a cut of the sales back in 2010 as a way of resisting low e-book prices. This system, lead by Apple's efforts, ended with a judge finding Apple guilty of conspiring to fix e-book prices.

Hachette continues to resist Amazon's insistence on low e-book prices, but this time without the weight of Apple's coordination with all of the major publishers behind it. Hachette and Amazon have yet to comment publicly on the struggle.

I will be honest and say that I am torn on how I feel. Amazon has the right either sell or not sell a product on thsi website. On the other hand it is sort of unfair if that reason for not selling that product is because content creator won't reduce the price.

Sans contract, Amazon has a legal right to sell or not sell books as it deems fit. That's why it was never illegal for stores like B&N and Chapters to somehow lose or misplace almost any book the floor staff didn't like.

There's not really a "good" side here.Amazon using it's dominating presence in the physical and electronical book market is not something I like to see. Although I doubt that Amazon is the only company with a dominating presence to abuse this.

On the other hand Hatchett was one of the guys who wanted me to pay a ridiculous price for e-books.

One thing I couldn't find was the actual prices being negotiated. While one retailer having such power is a bit of a concern, my observation is that digital goods have maintained price parity with physical goods despite the obvious economies of digital distribution.

When you consider all the effort that goes into milling wood pulp into paper, running the paper through a printing press, binding a book, packaging it, shipping it to a warehouse, then distributing the book to the retailers, you must consider why it costs about the same amount to get something that a sysadmin just has to upload to a few servers once.

I'm all for innocent until proven guilty, and the prices in question really do play into who is being the bad guy.

I wonder how low the 'low prices' Amazon is trying to get are compared to the level they were before Apple's price-fixing scheme?

They are about the same. Amazon before and after would price certain books for a fixed amount of time at a certain price. After that period of time the price would return to a normal non-promotional price.

New Releases are reduced in price, Best Sellers are reduced in price, but neither remain at that price for the lifecycle of the product for clear reasons.

Its like the $450 XBox One bundle, the contents of the bundle will change and the non-bundle is the regular price.

One thing I couldn't find was the actual prices being negotiated. While one retailer having such power is a bit of a concern, my observation is that digital goods have maintained price parity with physical goods despite the obvious economies of digital distribution.

When you consider all the effort that goes into milling wood pulp into paper, running the paper through a printing press, binding a book, packaging it, shipping it to a warehouse, then distributing the book to the retailers, you must consider why it costs about the same amount to get something that a sysadmin just has to upload to a few servers once.

I'm all for innocent until proven guilty, and the prices in question really do play into who is being the bad guy.

The DOJ looked into Amazon.

They didn't find any evidence of Amazon breaking the law, that part of Amazon business model was actually profitable, Apple on the other hand.....they did find evidence and thus a case was brought against them.

Lets just put it this way

Apple settled in EU for almost identical charges along with all 5 publishers. All 5 publishers here in the states settled with the DOJ. Perhaps I am old school but people who didn't commit something, don't settle, they prove they are innocent.

This also could be a case of amazon selling out of all of the copies that they have and not being able to buy more because the publisher is playing hard ball. For The Girls of August if amazon's license for a kindle version was revoked then they won't sell any more kindle copies. It just seems like there's two obvious reasons for what's going on. Either amazon or the publisher is being a total jerk but there seems to be no proof from the times article as to who it is.

One could say that redbox is trying to get a better deal by waiting 60 days after a dvd release before they stock a movie but it's because the studios won't sell the cheaper dvd's until that waiting period.

The problem with your argument is that they were not price fixing. They were resisting Amazon's monopolistic practices - and this is the result. The DOJ went after that good guys and protected the bad guy, and now we see the fruit of that fool's errand.

Amazon has been destroying other businesses by selling things at a loss. eBooks for a $3 loss. This is classic monopolistic practice, like Standard Oil back when it was taken down by legislation prohibiting that kind of monopolistic behavior.

If this continues, then the companies with deep pockets will function like Amazon - at a loss - until the competition is destroyed. Then they'll jack up the prices to beyond what a competitive market would allow.

And refusing to reduce your profits to make another company's profits fatter is illegal? Amazon can raise the price to whatever they want to get the profit margin they want. They would rather make the publisher's go out of business.

Sans contract, Amazon has a legal right to sell or not sell books as it deems fit. That's why it was never illegal for stores like B&N and Chapters to somehow lose or misplace almost any book the floor staff didn't like.

Read the New York Times article. This isn't just a "sell or not sell" books debate. Amazon is removing these books from prime, increasing the out-the-door shipping time on orders, and advertising other books as cheaper recommendations when browsing the pages for these books.

This article is, as is common, woefully less informative than the references article.

The problem with your argument is that they were not price fixing. They were resisting Amazon's monopolistic practices - and this is the result. The DOJ went after that good guys and protected the bad guy, and now we see the fruit of that fool's errand.

Amazon has been destroying other businesses by selling things at a loss. eBooks for a $3 loss. This is classic monopolistic practice, like Standard Oil back when it was taken down by legislation prohibiting that kind of monopolistic behavior.

If this continues, then the companies with deep pockets will function like Amazon - at a loss - until the competition is destroyed. Then they'll jack up the prices to beyond what a competitive market would allow.

All thanks to the idiots at the Department of Justice.

...no, they were price fixing. Apple + a number of publishers got together and said "we are going to sell books at this price, all of us" and Apple threw their weight behind it to get a better cut of cash. It's like the definition of price fixing. A bunch of HD tv screen manufacturers tried to pull the same shit a couple years ago too and got hammered for price fixing. Competitors don't get to get together and set a price floor for their products that they all agree on.

The problem with your argument is that they were not price fixing. They were resisting Amazon's monopolistic practices - and this is the result. The DOJ went after that good guys and protected the bad guy, and now we see the fruit of that fool's errand.

Amazon has been destroying other businesses by selling things at a loss. eBooks for a $3 loss. This is classic monopolistic practice, like Standard Oil back when it was taken down by legislation prohibiting that kind of monopolistic behavior.

If this continues, then the companies with deep pockets will function like Amazon - at a loss - until the competition is destroyed. Then they'll jack up the prices to beyond what a competitive market would allow.

All thanks to the idiots at the Department of Justice.

How does Amazon being a near-monopolist justify price-fixing, exactly? Apple tried that argument. The judge didn't buy it any more than the DoJ.

Amazon using it's dominating presence in the physical and electronical book market is not something I like to see. Although I doubt that Amazon is the only company with a dominating presence to abuse this.

This is going to invite lots of references to the judgment against Apple and with good reason. Apple was a retailer, discussing distribution terms with their wholesalers, and also discussing how their participation in the market would affect a competing retailer (Amazon). Doesn't seem illegal to me (collusion among wholesalers seems bad; communication between a wholesaler and a retailer just seems like a friendly form of contract negotiations). But, the judge decided their communications crossed a line, and violated the antitrust laws. Maybe so, I'm not an antitrust lawyer.

But that case is over, so let's please limit flame wars about it. What we're left with, you an me, is the resulting state of the market. Amazon's power was directly increased as a result of the judgment; which leads to hard-nosed bargaining; which leads to popular books being pulled off the market; which leads consumers to either 1) not get the book they would like to read on the beach; or 2) get it from a competing retailer, in this case from the iBookstore for a higher price. I don't have a citation, because it's Friday and I'm going to be on a beach soon, but it's pretty clear that the average cost of an ebook has risen, not fallen, since the judgment.

Purely from a policy standpoint, I can't see how this is a good state of affairs for consumers.

With regard specifically to digitized copies of books, I have a difficult time equating anything Amazon has done to WalMart or other "unsavoury" comparisons. They're not playing "hardball" with a supplier.

There are literally uncountably many 1s and 0s to be had, at trivial cost (arrangement, storage, and transmission).Compared to a physical book (with all the associated costs of existing in the physical realm, such as arrangement, storage, and transmission), it is logically absurd to think they should have equal value, much less cost.

Bad enough I remember books costing two bucks each (I think I bought a copy of Shogun by Clavell in paperback for 4 dollars), but being told I should pay 5-10 times that for an electronic copy is almost enough to drive one to "unsavoury" practices.

Amazon are being assholes. Legally, but still assholes; this kind of game is pretty common in the retail space. "We don't want to pay $2 for your widget. Lower the price, or we'll just run our stock down."

Hachette have already been assholes, and continue to do so. They want to charge as much for ebooks, with their almost negligeable per-unit overhead, as they would for comparatively expensive to produce and transport paper books. Pure profit mongering...which is what they're in business for.

Notionally I'd be on Amazon's side, but I'd prefer they be more upfront about it. Just put a note on relevant books--ebook or physical--like "We no longer sell this item because we don't agree with the publisher's pricing".

Sans contract, Amazon has a legal right to sell or not sell books as it deems fit. That's why it was never illegal for stores like B&N and Chapters to somehow lose or misplace almost any book the floor staff didn't like.

With regard specifically to digitized copies of books, I have a difficult time equating anything Amazon has done to WalMart or other "unsavoury" comparisons. They're not playing "hardball" with a supplier.

There are literally uncountably many 1s and 0s to be had, at trivial cost (arrangement, storage, and transmission).Compared to a physical book (with all the associated costs of existing in the physical realm, such as arrangement, storage, and transmission), it is logically absurd to think they should have equal value, much less cost.

Bad enough I remember books costing two bucks each (I think I bought a copy of Shogun by Clavell in paperback for 4 dollars), but being told I should pay 5-10 times that for an electronic copy is almost enough to drive one to "unsavoury" practices.

amazon's warehouse workers are suing for being treated almost as bad as slaves

Amazon using it's dominating presence in the physical and electronical book market is not something I like to see. Although I doubt that Amazon is the only company with a dominating presence to abuse this.

This is going to invite lots of references to the judgment against Apple and with good reason. Apple was a retailer, discussing distribution terms with their wholesalers, and also discussing how their participation in the market would affect a competing retailer (Amazon). Doesn't seem illegal to me (collusion among wholesalers seems bad; communication between a wholesaler and a retailer just seems like a friendly form of contract negotiations). But, the judge decided their communications crossed a line, and violated the antitrust laws. Maybe so, I'm not an antitrust lawyer.

But that case is over, so let's please limit flame wars about it. What we're left with, you an me, is the resulting state of the market. Amazon's power was directly increased as a result of the judgment; which leads to hard-nosed bargaining; which leads to popular books being pulled off the market; which leads consumers to either 1) not get the book they would like to read on the beach; or 2) get it from a competing retailer, in this case from the iBookstore for a higher price. I don't have a citation, because it's Friday and I'm going to be on a beach soon, but it's pretty clear that the average cost of an ebook has risen, not fallen, since the judgment.

Purely from a policy standpoint, I can't see how this is a good state of affairs for consumers.

Apple, et al, did more than discuss it's effects on Apple competitors. They engineered a situation where others couldn't effectively compete against Apple.

Amazon may hold a monopolistic position, and they may exploit it, but they haven't conspired with their suppliers to prevent others from competing.

Let's say Google or Microsoft bought B&N's ebook chain. They could roll it into their existing operations, sink some money into loss leaders to get user buy-in, and effectively compete. With Apple's arrangements, on the other hand, Apple's competitors would have to raise their prices to Apple's level.

So while Amazon's position may not be good for consumers, we'd be in a worse position had the DoJ not smacked Apple down.

And the DoJ can always revisit Amazon if they cross the line, as well.

They should have. What Apple tried to do was to break Amazon's monopoly. All legal experts in Win Phone universities who commented, said that the DOJ should never have brought the case, and that they should have investigated Amazon.

I thought what Apple tried to do was use the same model for the sale of ebooks as they already use for the sale of apps, songs and videos?

I will be honest and say that I am torn on how I feel. Amazon has the right either sell or not sell a product on thsi website. On the other hand it is sort of unfair if that reason for not selling that product is because content creator won't reduce the price.

But the content creator does indeed have options.

I don't see how that's unfair. The publishers have the right to set their price, and Amazon has the right to not pay it if they feel it's too high. If the publishers want to price themselves out of the market, I see no reason why Amazon should accept it. Amazon runs their e-book business on a wholesale/retail model (i.e. Amazon buys the licenses from the publishers and then sells them to the consumer), not an agency model like the app stores (which allow the publisher to set the price, and then just take a cut afterwards).

They should have. What Apple tried to do was to break Amazon's monopoly. All legal experts in Win Phone universities who commented, said that the DOJ should never have brought the case, and that they should have investigated Amazon.